What Are the Three Criteria a Company Should Use to Evaluate

question 131

Essay

What are the three criteria a company should use to evaluate and choose a cost driver? Briefly explain each of the three criteria.

---

Definitions:

Movie Rental

The act of paying a fee to borrow a movie for a limited period, traditionally from a physical store or, more recently, from an online service.

Marginal Utility

The additional satisfaction or benefit received by consuming one more unit of a good or service.

Video Game Rental

A service that allows consumers to borrow video games for a limited period of time in exchange for a fee, often operating through physical stores or online platforms.

Marginal Utility

The additional satisfaction or utility gained by consuming one more unit of a good or service.